RXT - Rackspace shares pop after Oppenheimer's bullish start on cloud adoption trends

Calling the company a "pure play on enterprise cloud adoption," Oppenheimer starts coverage on Rackspace Technologies (RXT) with an Outperform rating and $28 price target.Thesis on the $400B cloud market opportunity: "Enterprises are going to have to shift to cloud-native operations or be at risk of major business model disruption. However, the move to cloud is a daunting task, with many complexities and hidden costs. These incumbents need hand-holding and guidance and RXT can offer the monitoring, management, security and maintenance services/capabilities that theylack internally."Oppenheimer thinks Rackspace has revenue momentum in 2021 and views Street estimates as too low.Potential risks include RXT's margin stability, sales execution, and the health of the balance sheet.RXT shares are up 7.8% to $21.47.Upcoming catalyst: Rackspace will report earnings on February 18 after the bell.

For further details see:

Rackspace shares pop after Oppenheimer's bullish start on cloud adoption trends